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Arla battered by Muslim boycott

Danish dairy products and functional ingredients specialist Arla Foods Group is facing the prospect of losing $500 million worth of business in the Middle East as Muslim nations boycott Danish products in the wake of the publication of satirical depictions of Muhammad in a Danish newspaper.

Arla, Denmark's biggest exporter to the Middle East, estimates the boycott is costing it $1.8-million a day in the Middle East alone, and the company fears the worst. "For Arla, it's going to take a huge amount of effort and resources to rebuild whatever we can of what there once was," communications director Astrid Gade Nielsen said. "This is going to be an extremely long process."

Saudi Arabia's boycott of Danish goods on January 26 triggered a mass boycott across the region, resulting in Arla's cheese and dairy products being unanimously pulled from supermarket shelves. "We have experienced a total boycott in the Middle East, meaning we sell no products whatsoever," said Nielsen. "It is a severe blow to the company. We've been in the Middle East for 40 years. It's a region we believe in," she said. "It took 40 years to build it up and in five days it has gone to waste."

Arla published ads in Saudi Arabian newspapers but the campaign had little effect. "I think we as a Danish society need some sort of repositioning of Denmark in the Middle East. We have lost a lot of credibility and sympathy as a people and as a nation. I believe the Danish industry and the Danish government together need to do some sort of campaign," Nielsen said.